Justin Sun's $45 million dispute with World Liberty Financial will continue publicly after a federal judge rejected arbitration.
Sun alleges WLFI retained undisclosed powers to freeze, transfer, or burn his 4 billion tokens after they unlocked.
The case could test whether token holders have true ownership when issuers retain broad contractual control over digital assets.
Justin Sun’s $45 million dispute with World Liberty Financial will continue in open court after a federal judge rejected arbitration. The ruling keeps Sun’s individual claims public, while his case alleges WLFI used undisclosed contract powers to freeze, transfer, or burn his 4 billion tokens. Sun says the dispute now centers on who controls digital assets.
Arbitration Bid Fails In Federal Court
The dispute began with Sun’s reported $45 million investment in WLFI for 4 billion tokens. World Liberty Financial sought to move Sun’s claims into private arbitration and seal the proceedings.
However, the federal judge rejected that request, allowing Sun’s individual claims to continue publicly. As a result, the contractual terms behind the dispute can now face scrutiny in open proceedings.
Sun alleges that WLFI secretly retained powers to freeze, transfer, and burn tokens held by users. He also claims those powers lacked disclosure, governance, and a formal process.
Sun Challenges WLFI Over Token Controls
According to Sun, the controls became relevant within days after his tokens unlocked. He says WLFI used those contractual powers against his tokens after they became available.
Sun has framed the lawsuit around blockchain ownership rather than only the money involved. He argues that users should control assets they hold without needing permission from an issuer.
That argument rests on the principle “your keys, your coins,” according to Sun. He says an issuer’s ability to confiscate or freeze assets changes the meaning of digital ownership.
Federal Court Keeps Claims Public
Sun is seeking hundreds of millions of dollars in damages from the dispute. However, the latest ruling does not decide whether his allegations are valid.
Instead, the decision addresses World Liberty Financial’s attempt to force the claims into arbitration and keep proceedings sealed. Sun’s individual claims will remain in the public court process.
Sun also says the case could establish a legal precedent for token ownership and issuer controls. He wants the court to address whether “your assets” means actual ownership when contracts grant issuers broad control.
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